41-year-old Clarke, who has previous managerial experience with Salisbury City and Bristol Rovers - achieving two promotions with each side - was unemployed after leaving the Pirates in December last year and is relishing the chance to get back into management.
Clarke, a former midfielder who played for the likes of Mansfield Town, Hartlepool United, Stockport County, Port Vale, Rochdale and Salisbury City during an 18-year near 500 game career, will have his work cut out following the Saddlers' relegation to League Two.
Speaking via the club's official website, Darrell, who was among a host of manager the bookies had down as potential candidates, insisted he was up for the challenge, and discussed his desire to achieve both his and the club's shared goals.
Clarke said; "I can’t wait to get started. I have spoken with members of the Board on a number of occasions and this is a project I am really looking forward to. I am excited by the challenge that lies ahead.
"This is a great club and I can’t wait to get my teeth into the task at hand. The club have had a couple of disappointing seasons, and we now find ourselves in League Two.
"I want to give these brilliant fans something to shout about, put a smile on their faces and give them a team that will give their all for the club and the badge. I like my teams to be on the front foot and play attractive, attacking football with the ability to adapt to different scenarios.
"I know all about the division we are in, I’ve had success at League Two level before and I want to bring the good times back. I will work tirelessly to achieve our shared goals."